Shiels' side were the favourites from four teams to secure a place in the upper half of the table but will now contest the final five games of the campaign with the top flight's also-rans after losing 2-1 to Dundee.
Even with a defeat - confirmed after former Killie favourite Gary Harkins scored either side of Kris Boyd's equaliser for the home side - the Ayrshiremen could have snuck in on goal difference.
But then Rory Boulding, another one-time Kilmarnock player who was allowed to head for Tayside with Harkins in January, netted a last-minute winner for the Dark Blues' city rivals Dundee United at Tannadice to seal a 1-0 win over Aberdeen and pinch Killie's slot in sixth place.
That forced Shiels to admit he had got it all wrong when he allowed both players to move on.
He said: "It's a hard one to take. I'm very low but I've got to pick myself up so I can pick the players up for Monday and get back to work.
"I don't know what went wrong. We had two games to win one game. But, as fate would have it, Gary came back and scored two goals while Rory Boulding has scored a goal for United in the last minute.
"So I have got to take the responsibility for letting those players go. But that's what happens in football, they come back to haunt you. Gary is a good player, I have always said that, and it's just one of those things.
"I feel sorry for the supporters and the club because they trusted me to deliver and I failed. I have got to accept responsibility for today."
While Kilmarnock lacked fight Shiels also admitted they ignored his pre-match plan.
"It seemed like all of our season was put into one 90 minutes," he said. "We went with long balls to Boydy. I was disappointed that we didn't build it up and play our normal game.
"I was frustrated and, the way things have turned out, it's a really bad day. But it's not a crisis as it's an opportunity now. When I came to the club we were relegation fodder but we have progressed.
"The younger players didn't play as well as they can today but they will have learned from it. I feel we can kick on now and finish the season with some zest."